Global economy withstands energy challenge
OECD projects 2.9% growth for the global economy this year. The organization says countries weathered the energy supply shock from the Middle East conflict better than expected. The post Global economy withstands energy challenge appeared first on ANBA News Agency .
The global economy has managed to withstand the energy supply shock sparked by the Middle East conflict better than anticipated, as indicated by the OECD's Economic Outlook 2026 report. The organization forecasts global growth of 2.9% in 2026 and 3.0% in 2027, though it cautions that uncertainties surrounding the conflict's progression could pose risks to these predictions.
The impact of oil prices was lessened due to alternative supply routes being utilized, dropping inventories, heightened production outside the Gulf region, and dwindling demand, particularly from China. However, the OECD warns that more persistent disruptions to Middle East energy exports or weather-related supply shocks could influence global growth.
For the United States, the OECD predicts GDP growth of 2.2% this year and 2.1% next year, while the euro area is expected to grow by 1% in each of the two years. China's economy is anticipated to expand by 4.5% in 2026 and 4.2% in 2027. Saudi Arabia, the largest economy in the Arab world, is projected to contract by 1.8% in 2026 but grow by 4.1% in 2027.
Brazil is expected to grow by 2% in the current year and 1.9% in the following year. The OECD notes that persistent inflationary pressures and uncertainty continue to burden the short-term outlook, with G20 economies projected to experience inflation of 4.1% in 2026 and 3.6% in 2027. The organization highlights several risks that remain tilted to the downside, including rising long-term sovereign bond yields intensifying fiscal pressures on governments, rapid investment in AI boosting demand for external financing, and weather events potentially exacerbating existing pressures on commodity prices and driving up food prices.
OECD Secretary-General Mathias Cormann expressed these concerns, stating that governments must focus support where it is most needed, maintain public spending on a sustainable path, and lay the groundwork for long-term growth by enhancing skills, diversifying energy sources, and accelerating the adoption of artificial intelligence.
Written by urgent.news from ANBA News Agency's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
